Property Aquisition Costs in Greece
All Costs related to the purchase of Real Estate Property in Greece
Author: Ioannis Valmas, Attorney at Law, LLB, LLM, BSc, Managing partner @ Valmas &Associates
1a. Costs for Purchase of Property in Greece
A purchase agreement for Real Property in Greece is effectuated through the drafting of the notarial deeds and the subsequent signing of the final Contract for the Sale of Property by the seller and buyer (or their proxies).
Buying Real Property in Greece bears various associated costs/fees which can be divided in the following sub-categories:
(a) Notary fees: They are paid by the buyer of real property, and cover the drafting and approval of certificates provided by the sellers (approximately 1.2-1.4% of the tax value or purchase value of the property although they can considerably vary as page numbers, copies of deeds etc. increase costs particularly in respect to transactions of low value properties).
(b) Legal Fees: They are paid by the party that the lawyer represents, and albeit not compulsory they are strongly advised as a lawyer shall, among others, commence due diligence and a historical check of the titles (deeds) from previous to current owners, proof reading of the contracts for sale, representation of the buyer at the signing of the deeds making sure everything is in order, registration of titles to the Land Registry and Cadastral Authorities etc. Lawyer fees are freely negotiated between the parties and vary depending – among others – on the experience of the lawyer, the complexity of the matter at hand etc.
(c) Realtor Fees: The estate agent’s fees are not specified by law and fees are freely negotiated between the contracting parties and subject to a written agreement. Usually a fee of a percentage of 2 percent of the purchase price of the property is agreed between the realtor and the seller/buyer (2 percent charged to each side), yet this arrangement may vary, depending on the transactional value and various additional factors that may raise or decrease the said norm of 2 percent. The legal framework for the conditions of providing realtor services as well as the rights and obligations of realtors are determined by the Greek Civil Code (703-707) and Law 4072/2012 (Articles 197-204). Fees/costs can be higher for low value property transactions.
(d) Property Registration Fees: Fees related to the Registration of Real Property in the relevant Land registry and/or Cadastral Office (0.5-0.7% of the property value).
Fees/costs are higher for low value property registrations.
(e) Property Transfer Tax: As of 01/01/2006 (in respect to buildings for which the building permit was issued after the said date), a VAT of 24 percent is imposed on the purchase value on the first sale of newly built buildings by a manufacturer, or by a person who deals professionally with the construction and the sale of buildings.
For all other properties that do not fall under the above category, the transfer is charged with a real estate transfer tax at 3.09 percent.
Assessment of Property Value
The value of property in Greece is assessed according to the so-called system of objective value (also known as tax value). This system provides for a minimum value of real property according to objective criteria such as location, size, shared facilities in the area, age of a building etc. This system has been imposed so that the tax authorities have a minimum value as reference when imposing taxes in relation to property ownership/purchase-sale/ inheritance. In cases of sale of property, the transfer tax is calculated on either that “objective value” or the value agreed in the purchase agreement, whichever is the highest. The objective values are usually significantly lower than the market values. Since not all areas in Greece have been valued/assessed, when there is no such assessment, the tax authorities make an estimate of the value according to similar transactions in the area or other available data.
Whilst every care has been taken to assure that the information contained in this document is accurate, this article is intended for informational purposes only; it is not intended to impart legal advice; readers are advised to seek independent legal advice prior to acting on any statements contained herein. The information contained in this page is in no way a substitute for the Law, which is binding only in the original Greek legislative text.